LCRA Presentation to BCRUA
James Kowis, manager of water supply planning for the LCRA, made a 30-minute presentation to the Brushy Creek Regional Utility Authority board of directors on March 24. The presentation gave an overview of the LCRA’s water supplies – specifically, how much water it has, how much water is contracted or otherwise committed, where are customers using water (and how much is being used), and what LCRA is doing to increase supplies.
The board asked for the presentation because the BCRUA project is purchasing water from the LCRA out of Lake Travis, and concerns have been expressed about the project’s impact on the lake.
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May 21st, 2008 at 9:45 am
How much more water is available to sell? Is it LCRA Board policy that it has to sell water to anyone outside its service area that asks?
No economic or environmental studies are planned on the effects of these two, huge deep water intakes. These intakes are designed near the bottom of Lake Travis. If 643msl was scary, what would happen at 565msl almost 80′ lower? What’s left? These cities should secure a second source of water instead of investing incredible amounts of taxpayer dollars to go deeper in Lake Travis. Does the LCRA not control the depth, location, and size of these intakes? If these intakes will not drain the lake. get off the bottom! What are the adverse effects on the other water supply holders?
What percentage of the BCRUA contracts will be curtailled at 595msl, 585msl, 575msl, and 565msl? Is the LCRA in the process of modeling the lake levels if all the current contracts were in full use in drought of 2006 and the flood of 2007? Can all the intakes take twice their average amounts in the summer months? Will this be reflected in the modeling?
Joe Beal, LCRA General Manager on June 14, 2006, “If the lake going empty is going to have an impact on you, you better plan for it. It could be happening this year.”
August 10th, 2008 at 12:22 pm
In 2007, Willaimson County’s Senator Ogden, Chair of the Senate Finance Committee, appropriated $365M to the TWDB. Three months later this project filed a funding application for $358M. The project applied under D-Fund because it does not require joint liability or bond insurance. Most D-
Fund loans are under $5M.
* Leander and Cedar Park considered no other alternative water source.
These Brazos Basin cities have a drought-proof, prolific aquifer available just east of Round Rock. This would be a second source of water!
* Leander’s increased water supply contract has not been approved by TCEQ. No economic or environmental studies are planned on the project’s effect on Lake Travis. Lake Travis is the single most important economic and environmental driving engine of Central Texas.
* D-Fund can not be used for projects that result in the inter-basin transfer of surface water necessary to supply the 50-year water requirements of the river basin of origin.
* BCRUA has no eminent domain power within the Village of Volente without its consent. The project’s recommended industrial intake site is in an existing residential neighborhood. How will the project follow Volente’s zoning restrictions?
* Leander’s ability to afford this project is questionable. Leander has 47% of the project cost and 12% of the population. In 2008 the estimated project cost increased by $63M, delaying $20M to Phase 2. What is the current project cost and cost per acre foot?
* The BCRUA Master Agreement does not have joint and/or several liability, or bond insurance. If one city defaults, the others are not liable or responsible. Has default been explained to the residents of Leander? Is the BCRUA lien subordinate to the LCRA?
The BCRUA is going after the wrong source of water. Lake Travis is drought prone, over-stressed and over-promised. How is the TWDB allowing this huge financial and health risk?
August 29th, 2008 at 8:14 am
It is not correct that most D-Fund loans are less than $5 million. In fact, the amount of these loans is quite varied, ranging from a couple hundred thousand dollars to hundreds of millions of dollars.
The BCRUA member cities studied alternatives for supplying their current and projected citizens with a reliable, cost-effective source of water and determined the Lake Travis option to be the best. The BCRUA was qualified to seek a loan from the Texas Water Development Board, and the requested loan was approved ( http://www.twdb.state.tx.us/publications/press_releases/2008/01/BCRUA.asp ).
The BCRUA lien is not subordinate to LCRA.
September 8th, 2008 at 4:12 pm
Last week, BCRUA President Scott Rhode said an aquifer estimate would cost $40,000. Why isn’t this being done? What are the cities scared of, saving hundreds of millions of dollars? The Phase 1 engineering costs are $22M, but this $40,000 is not a wise investment?
In 2006, LCRA General Manager Joe Beal said, “This lake is going to go empty the night before it rains. If the lake going empty is going to have an impact on you, you better plan for it.” What’s the plan?
Only Round Rock studied alternative water sources. The Lake Travis option was estimated sharing with Cedar Park or Austin. The aquifer water was priced for Round Rock alone, why?
How many of the loans are hundreds of millions; how many are under $5M? If one city defaults the other cities are not liable. What are the steps in a default? Why is their no joint liability or bond insurance? Why did Leander have to put up a one-year reserve fund? The LCRA has first dibs on Leander’s water revenues.
Over 1,200 letters in opposition to this water supply project have been sent to the elected officials of Round Rock, Leander and Cedar Park through http://www.draininglaketravis.org.
October 10th, 2008 at 5:03 pm
“Last week, BCRUA President Scott Rhode said an aquifer study estimate would cost $40,000. Why isn’t this being done? What are the cities scared of, saving hundreds of millions of dollars? The Phase 1 engineering costs are $22M, but this $40,000 is not a wise investment?”
As previously discussed, Ms. Graci, the City of Round Rock completed a study that looked at aquifer sources in 2005. A link to that study is included. The BCRUA determined, after reviewing all the options, that the least expensive aquifer option would (for Round Rock alone) cost $78 million more than the least expensive Lake Travis option. (The options considered the cost of the water, the cost of construction, the facilities that would be necessary, and operational costs, such as power to operate pumps, etc.) Some of the costs projected in 2005 were updated and presented to the BCRUA board at its meeting in August. Below please find a link to that presentation. The conclusion of the BCRUA was that, using current costs for pipeline and power, the least expensive aquifer option is now $130 million more expensive than the least expensive Lake Travis option.
Study Link http://www.bcrua.org/wp-content/uploads/2007/12/lake-travis-raw-water-supply-system.pdf
Presentation Link http://www.bcrua.org/wp-content/uploads/2008/09/bcrua-board-meeting-090208-hdr-water-supply-presentation.pdf
We are not recommending a new study for all three cities because we believe it is an unnecessary and extra expense – if it cost Round Rock alone $130 million more to access aquifer water than Lake Travis water, it would cost the partner cities even more than that since water from the aquifer would have to be pumped approximately another 15 miles uphill to Leander and Cedar Park. It would be an additional 15 miles of pipeline to construct as well as additional power costs to pump the water.
“In 2006, LCRA General Manager Joe Beal said, “This lake is going to go empty the night before it rains. If the lake going empty is going to have an impact on you, you better plan for it.” What’s the plan?”
All three partner cities have drought contingency plans. In a nutshell, those plans require increasing measures of restrictions on uses of water as each city’s ability to treat and deliver water is diminished by a drought. All start with voluntary restrictions and ratchet up to mandatory restrictions as supplies and delivery capacities diminish. The Texas Commission on Environmental Quality (TCEQ) has approved each city’s plan, and each city is required annually to provide a water conservation report on the anniversary of the passage of its Water Conservation Plan and periodically to review and update its Water Conservation Plan.
“Only Round Rock studied alternative water sources. The Lake Travis option was estimated sharing with Cedar Park or Austin. The aquifer water was priced for Round Rock alone, why?”
It was Round Rock in 2005 studying its future alternative water sources. That study showed the best priced option was a partnership with Cedar Park for Lake Travis water. So it was Round Rock that approached Cedar Park and, later, Leander, with the regional concept. As already mentioned, if it cost Round Rock an additional $78 million to $130 million more for aquifer water, it would cost the partner cities even more.
“How many of the loans are hundreds of millions; how many are under $5M?”
We assume you are referring to D-fund loans from the Texas Water Development Board (TWDB). We recommend you request that information from the TWDB, since it is the entity that makes those loans.
“If one city defaults the other cities are not liable. What are the steps in a default?”
The Brushy Creek Regional Utility Authority can take legal action to enforce the master agreement among the three cities, in which each city has agreed to set rates sufficient to pay the bonds that have been issued to fund the project.
“Why is their no joint liability?”
There is no joint liability because the Texas Constitution prohibits one city from guaranteeing the debts of another city. It was our choice to offer several liability, and not joint and several.
“Why is there no bond insurance?”
First, the TWDB does not afford a lower rate with an insured issue in the D Fund. Second, the TWDB does not accept any of the insurance companies currently participating in the bond market.
“Why did Leander have to put up a one-year reserve fund?”
Most contract revenue bond issues require a debt service reserve equal to one year’s debt service. Round Rock and Cedar Park were exempted from this requirement because of their higher bond rating. Leander was not exempted.
“The LCRA has first dibs on Leander’s water revenues.”
The statement is not correct. Leander entered into an agreement that said they could not do anything to subordinate LCRA’s rights. Leander’s responsibilities to BCRUA are not subordinated to LCRA, but neither is Leander’s responsibility to BCRUA subordinate to LCRA. The two organization’s rights are pari passu, e.g., of equal standing.
“Over 1,200 letters in opposition to this water supply project have been sent to the elected officials of Round Rock, Leander and Cedar Park through http://www.draininglaketravis.org.”
We always appreciate the comments of any citizen who has something relevant to add to the discussion of this project.
The City Councils of Leander, Round Rock and Cedar Park voted to support the BCRUA. They collectively represent approximately 148,000 citizens.
October 26th, 2008 at 5:29 pm
The revised total project costs detailing Phases 1, 2 & 3 have not been released since May, why? When will this information be available?
The cost of the Lake Travis option in the 2005 study was $138M now it’s over $400M? Have an independent engineering firm who is not profiting on this project compare the costs and benefits of Lake Travis and Simsboro water.
I think Joe Beal knew the cities had drought conservation plans when he talked about the lake going dry since they are required in LCRA contracts. Have your cities done annual conservation reports? Do you know what percentage of the cities water supply contracts will be curtailed? Why can’t your engineering firms answer that?
D-Fund is for uncomplicated projects with no significant permitting, social, environmental, engineering, or financial issues. That is why most of the projects are under $5M. How did this project qualify for D-Fund with inter-basin transfers, eminent domain, zoning, permitting, water rights, default litigation, and water rate concerns? Just Phase 1 has $22M in engineering costs. What does it take to be a complicated project?
You made the statement that most D-Fund loans are not under $5M. Since 2005, the next highest D-Fund loan to the project’s $309M was $11M; and 70% have been under $5M.
It’s amazing that economy of scale only works for the Lake Travis option estimated by conflicted engineering firms. This year, Round Rock’s utility director asked the engineering firm what happened to the economy of scale when looking at their current costs.
Leander’s increased water supply permit #5677 needs TCEQ approval. How does this project have the water right certification to use this water?
Leander’s City Council adjusted their water rates 21% over the next three years instead of the 43% increase for lower than expected growth. Who oversees that rates are sufficient to pay for this project? What are the steps in a default? What could the citizens of Leander be liable for? Is the Leander Council concerned about their constituents or future developers?
Was the 2nd amendment to Leander’s Wholesale Potable Agreement changed so that Leander could pledge water revenues on parity for debt obligations to LCRA and BCRUA? Are the cities pledging gross or net revenues to the TWDB funding? How is the City of Leander planning on funding the costs above the $91M in contract revenue bonds since capitalized interest, additional engineering fees, etc… were not included?
What impact is the current economy having on the project?